Is condominium ownership right for you?

“Amazing lake and city views .. in the centre of it all .. carefree living .. pool and gym on-site .. carrying groceries up an elevator .. neighbours can be a bit noisy .. living space is a little small ..”

Whether an urban high rise, a suburban townhome, or recreational area loft-style, the most common owners are first time buyers and empty nesters. A condominium consists of your own private unit along with collective ownership of common areas.

Much can be said about the benefits and drawbacks of this type of home ownership.

The pandemic induced exodus from large city buildings to more spacious suburban homes featured prominently in daily news reports. Motivated by social distancing concerns and the desire for easy access to outdoor space, the newly-working-from-home went in search of larger properties. This in turn, triggered huge price increases in outlying suburban areas. Moving forward, it is likely a return to the city centre condominium lifestyle will be a choice for many.

What is a condominium? Legally speaking.

A Condominium is a Corporation with an elected Board of Directors. The declaration, or agreement, dictates how the condo operates and is governed. Whether freehold or leasehold, each is unique, with its own governance, bylaws, rules, amenities and features.

The bylaws and rules of the corporation spell out your individual rights and obligations as an owner.

Bylaws are legally binding and along with the rules, should be carefully reviewed before deciding on a particular condominium property. Bylaws govern how the corporation operates and functions. Rules on the other hand lean towards the governance of the day-to-day living of its residents.

Rules and bylaws commonly cover:

1. The number of occupants allowed per unit.
2. Noise restrictions.
3. Parking for individual units and guests.
4. Smoking rules, including those related to cannabis.
5. Leasing of units.
6. The time of day building amenities can be accessed.
7. Alterations/remodelling of personal suites.
8. And …  the really big one – PETS!
   A gentle giant of a dog weighing 95 pounds, will not be welcome if the bylaw allows for only one small pet under 25 pounds. Don’t make the mistake of assuming it doesn’t matter. Bylaws are frequently strictly enforced, have legal teeth, and established for the benefit of all.

The status certificate examines the operational, legal, and financial health of the corporation. Best scrutinized by a lawyer, the certificate will contain crucial information.

• Statement of common expenses.
• Personal unit’s share of expenses.
• Pending or on-going legal actions.
• Current budget and most recent audited statements.
• Copy of the declaration, bylaws and rules, and management agreements.
• Reserve fund details.
• Assessments relating to reserve funds.
• Any planned additions, alterations and improvement to common areas.

It is important to educate yourself. Ask questions.

If you believe you have found the ideal condominium, go through a checklist of questions which, at a minimum, should include:

• How large is the reserve fund?
• Is there sufficient savings to cover planned and unexpected common area financial obligations?
• Are there any structural problems that could result in higher condominium fees?
• Are there bylaws that do not work for your family?
• Is the management company running the day to day business of the corporation qualified and reliable?

Speaking of condo fees.

So what about the fees? The operational budget, your monthly contribution to the common elements, may cover only management fees, maintenance, insurance and reserve fund. Others may include everything – heat, hydro, water, building insurance, maintenance, management expense, parking, and more. Don’t be afraid of operational/condo fees (even though they are ever present and do increase over time as the building ages and needs more attention). A single family detached home, no differently, has demands for upkeep and money should be regularly set aside for future expenses.

Part of your monthly condo fee goes into the reserve fund. This fund pays for major occasional expenditures, (repaving the parking garage floor, replacing HVAC systems, etc.), unforeseeable issues, and emergency expenses not covered in the operational budget. Basically – savings set aside for a rainy day.

How are the condo fees determined for your private unit?

Unit Factor. The unit factor is expressed as a percentage, representing your ownership interest in the condominium’s common elements. This proportionate share is generally calculated on the size and the location of your unit within the building. In addition, budget for the expenses outside of your monthly condominium fee: mortgage payments, property taxes, contents insurance, utilities not covered by the common expenses, and the general upkeep/maintenance of your personal unit.

What is a condominium? Practically speaking.

There are a variety of reasons why condominium living might be the right decision for you and your family.

Interestingly, whether just starting out in life, or planning retirement living, these polar opposites share much in common when choosing a condominium lifestyle.

Condominiums often provide a more financially reasonable entry into the real estate market for first time buyers. Sometimes it’s the only option, tending to be more affordable than single family properties.

Purchasing a condominium can be a smart move for retirees no longer wanting or needing a large home and the associated workload. Those who have plans to travel or enjoy retirement in warmer climates during the winter needn’t anguish over upkeep or security concerns. Just lock the door and go.

In another article, the investment aspect of buying a condominium unit is explored.

Convenience versus space.

If you are right-sizing, the square footage is likely considerably smaller than your current living space. Relocating to a condo involves the often liberating exercise of sorting and keeping only possessions you actually need and use. Big plus – far less time will be spent on day to day cleaning and maintenance.

Newer buildings are designed to feel spacious by presenting open concept floor plans, massive windows, and perhaps even outdoor living space.

Living in a condominium suite can be challenging for younger families with children. A single family detached home, generally provides more area and an opportunity for alterations and renovations should additional space be required. Kids have stuff, so it’s important to find furniture that can perform double duty in your home.

Most buildings have storage lockers available to residents. This is helpful in providing a secure location for infrequently used or seasonal items. Before buying, check if the parking space(s) and locker are owned or merely allocated.

Amenities. How high up are they on your wish list?

Most buyers give careful consideration to the amenities. After all, they contribute to the enjoyment and quality of daily life. Some developments offer ultra luxury, while others not much more than the bare bones.

• indoor pools
• fitness facilities
• day spas
• party rooms
• club lounges
• guest suites
• rooftop terraces
• concierge/security

These features provide the “I wants” but such privileges are paid in higher condo fees.

If you prefer to use private recreational and social memberships, or relish a more outdoorsy lifestyle, then a building with a less extensive list of amenities might be the best financial choice.

Deciding where to live.

You’ve heard it before.

Location. Location. Location.

When it comes to condominium living, you may find yourself in the midst of a vibrant neighbourhood in the city. Parks, waterfront, daycare, schools, entertainment, markets and shopping may only be a few minutes walk. A draw for many residing in such a locale is the ease and speed of commuting back and forth to work. Public transit is often close by and for the most part – reliable.

Empty nesters deciding to downsize can take full advantage of the many attractions found in the city core. The walkability score and accessibility of public transit makes shopping or even a night out on the town both convenient and easy. Leave the car for weekend outings or for visits with the grandkids.

Condominium developments are surging in suburban neighbourhoods. Boutique low rise units appeal to those wanting a space with more character, while high rise developments are frequently the location of choice for young professionals and families. Townhome complexes range from entry level to well appointed executive style. For some, remaining in a neighbourhood close to family, friends and familiar services is ideal. For others, finding peace and quiet outside of the GTA is the dream retirement.

The social aspect should not be overlooked.

Unlike single-or-semi-detached homes, consider the social aspect of condominium living. It’s a closely-knit environment and you should invest a little time investigating.

Different complexes may be ideal for some but not for others.

If you are looking forward to a quiet retirement, then a building favoured by youthful, single professionals hosting frequent parties and social gatherings may not be the suitable complex. Better to seek out condos popular with retirees wanting to avail themselves of group activities and amenities catering to a senior lifestyle. Perhaps weekly card games, an area for gardening, or organized day trips would suit.

Is the condo way of life right for you?

It may very well be the right choice. Simply remember it’s not just about the purchase price or the monthly fees and expenditures. Do a little research into the personality of the building. Find the home with the best fit. Whatever your criteria.

“Amazing lake and city views .. in the centre of it all .. carefree living .. pool and gym on-site .. carrying groceries up an elevator .. neighbours can be a bit noisy .. living space is a little small ..”

Any and all of these comments and characteristics, and more, are part of the condominium lifestyle. As in every other type of home ownership, there are pros and cons. Embrace the good aspects, and as far as some of the bad – there’s often a solution to be found.